What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-06 · 149 added, 122 removed, 633 unchanged (30% of the section changed)

1 unchanged sentence

KOPPERS HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended June 30,

Six Months Ended June 30,

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions, except per share amounts)

12 unchanged sentences

tax benefit of $ 0.0 , $ 0.4 , $ 0.0 and $ 1.4

Gain on sale of discontinued operations

Net income (loss) attributable to noncontrolling

(Loss) gain on sale of discontinued operations, net of

tax benefit (expense) of $ 0.2 , $( 8.3 ), $ 0.3 , $( 8.3 )

Net loss attributable to noncontrolling

Net income attributable to Koppers

7 unchanged sentences

Earnings per diluted common share

Comprehensive income

Comprehensive income (loss) attributable to

Comprehensive (loss) income

Comprehensive (loss) income attributable to

noncontrolling interests

Comprehensive income attributable to Koppers

Comprehensive (loss) income attributable to Koppers

Weighted average shares outstanding (in thousands):

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEET

September 30,

(Dollars in millions, except per share amounts)

38 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

6 unchanged sentences

Gain on sale of assets

Insurance proceeds

Deferred income taxes

8 unchanged sentences

Capital expenditures

Insurance proceeds received

Cash provided by sale of assets

Net cash used in investing activities

Net cash (used in) provided by investing activities

Cash provided by (used in) financing activities:

Net increase in credit facility borrowings

Net increase (decrease) in credit facility borrowings

Repayments of long-term debt

2 unchanged sentences

Payment of debt issuance costs

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

34 unchanged sentences

and measurement of cash incentive plans.

Events and changes in circumstances arising after June 30, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

Events and changes in circumstances arising after September 30, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

New Accounting Pronouncements

4 unchanged sentences

The guidance was effective upon issuance and may be applied prospectively to contract modifications made, hedging relationships entered into, and other transactions affected by reference rate reform, evaluated on or before December 31, 2022, beginning during the reporting period in which the guidance has been elected.

The Company’s debt agreements include the use of alternate rates when LIBOR is not available and the Company does not maintain hedging relationships applicable to this ASU.

Our debt agreements include the use of alternate rates when LIBOR is not available and we do not maintain hedging relationships applicable to this ASU.

We do not expect the application of this update to have a material impact on our financial statements and, to the extent we enter into modifications of agreements that are impacted by the LIBOR phase-out, we will apply such guidance to those contract modifications.

2 unchanged sentences

Recent closure activities include:

In June 2021, we sold a subsidiary related to our closed CMC facility located in Uithoorn, the Netherlands and we recorded a gain on sale of $ 0.3 million .

In June 2021, we sold a subsidiary related to our closed facility located in Uithoorn, the Netherlands and we recorded a gain on sale of $ 0.3 million .

In April 2014, we had ceased coal tar distillation activities at the facility.

2 unchanged sentences

Refer to Note 4 – “Discontinued Operations” for more details.

In October 2018, we sold our Clairton, Pennsylvania coal tar distillation facility.

In October 2018, we sold our closed Clairton, Pennsylvania coal tar distillation facility.

In the first quarter of 2021, certain post-sale conditions were achieved and the buyer of the property released cash held in escrow to us resulting in a gain on sale of $ 1.8 million.

1 unchanged sentence

Most recently, we discontinued production activities at our crosstie treating plant located in Denver, Colorado in the third quarter of 2020.

In October 2021, we sold the facility and will recognize a gain on the transaction of approximately $ 23 million during the three months ended December 31, 2021.

Details of the restructuring activities and related reserves are as follows:

10 unchanged sentences

Sale of subsidiary

Reserve at June 30, 2021

Reserve at September 30, 2021

Discontinued Operations

1 unchanged sentence

KJCC was located in Pizhou, Jiangsu Province, China and was a 75 percent-owned coal tar distillation company which was part of our CMC segment.

Included in the cash proceeds is restricted cash of $ 2.3 million which is being held in an escrow account and is recorded within cash and cash equivalents as of June 30, 2021 to cover potential customary indemnity claims by the buyers for a remaining period of 9 months.

In addition, an amount of $ 5.6 million is recorded in accrued liabilities as of June 30, 2021 and December 31, 2020 in anticipation of final post-closing working capital adjustments payable to the buyers.

Included in the cash proceeds is restricted cash of $ 2.3 million which is being held in an escrow account and is recorded within cash and cash equivalents as of September 30, 2021 to cover potential customary indemnity claims by the buyers for a remaining period of six months .

In addition, an amount of $ 6.1 million and $ 5.6 million is recorded in accrued liabilities as of September 30, 2021 and December 31, 2020, respectively, in anticipation of final post-closing working capital adjustments payable to the buyers and related withholding taxes.

This final adjustment was paid to the buyers in October 2021.

The sale of KJCC represented a strategic shift that had a major effect on our operations and financial results in 2020 and were, therefore, classified as discontinued operations in our condensed consolidated financial statements.

Net sales and operating loss from discontinued operations for the three and six months ended June 30, 2020 consisted of the following amounts:

Three Months Ended June 30,

Six Months Ended June 30,

Net sales and operating loss from discontinued operations for the three and nine months ended September 30, 2020 consisted of the following amounts:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

Operating loss

Operating income (loss)

In addition, we ceased carbon black production at our CMC facility located in Kurnell, Australia during 2011.

Costs associated with this closure are also included in income (loss) from discontinued operations on the condensed consolidated statement of operations and comprehensive income.

Costs associated with this closure are also included in income (loss) from discontinued operations on the condensed consolidated statement of operations and comprehensive (loss) income.

Fair Value Measurements

Carrying amounts and the related estimated fair values of our financial instruments as of June 30, 2021 and December 31, 2020 are as follows:

June 30, 2021

Carrying amounts and the related estimated fair values of our financial instruments as of September 30, 2021 and December 31, 2020 are as follows:

September 30, 2021

December 31, 2020

8 unchanged sentences

The fair value of our Credit Facility approximates carrying value due to the variable rate nature of this instrument.

Comprehensive Income and Equity

Total comprehensive income for the three and six months ended June 30 , 2021 and 2020 is summarized in the table below:

Three Months Ended June 30,

Six Months Ended June 30,

Comprehensive (Loss) Income and Equity

Total comprehensive (loss) income for the three and nine months ended September 30 , 2021 and 2020 is summarized in the table below:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

Changes in other comprehensive income:

Changes in other comprehensive (loss) income:

Currency translation adjustment

Unrealized gains on cash flow hedges, net

of tax expense of $ 0.1 , $ 11.6 , $ 4.6 and $ 1.7

Unrealized (loss) gain on cash flow hedges, net

of tax benefit (expense) of $ 6.1 , $( 5.3 ),

$ 1.2 and $( 6.9 )

Unrecognized pension net loss, net of tax

expense of $ 0.1 , $ 0.1 , $ 0.3 and $ 0.2

Total comprehensive income

Comprehensive income (loss) attributable to

Total comprehensive (loss) income

Comprehensive (loss) income attributable to

noncontrolling interests

Comprehensive income attributable to Koppers

Comprehensive (loss) income attributable to Koppers

Amounts reclassified from accumulated other comprehensive loss to net income consist of amounts shown for changes in or amortization of unrecognized pension net loss.

This component of accumulated other comprehensive loss is included in the computation of net periodic pension cost as disclosed in Note 13 – “Pensions and Post-Retirement Benefit Plans.” Other amounts reclassified from accumulated other comprehensive loss related to derivative financial instruments, net of tax, of $ 12.7 million and $ 19.9 million for the three and six months ended June 30, 2021, respectively, and $ 2.3 million and $ 3.4 million for the three and six months ended June 30, 2020, respectively.

The following tables present the change in equity for the three months ended June 30, 2021 and 2020, respectively:

This component of accumulated other comprehensive loss is included in the computation of net periodic pension cost as disclosed in Note 13 – “Pensions and Post-Retirement Benefit Plans.” Other amounts reclassified from accumulated other comprehensive loss related to derivative financial instruments, net of tax, of $ 11.1 million and $ 31.0 million for the three and nine months ended September 30, 2021, respectively, and $ 1.3 million and $ 2.1 million for the three and nine months ended September 30, 2020, respectively.

The following tables present the change in equity for the three months ended September 30, 2021 and 2020, respectively:

(Dollars in millions)

4 unchanged sentences

Noncontrolling

Balance at March 31,

Balance at June 30,

Net income (loss)

Issuance of common stock

3 unchanged sentences

Currency translation

Cumulative translation

adjustment loss on

sale of subsidiary

Unrealized gain on cash

Unrealized loss on cash

Unrecognized pension

Repurchases of common

Balance at June 30,

Balance at September 30,

(Dollars in millions)

4 unchanged sentences

Noncontrolling

Balance at March 31,

Balance at June 30,

Net income (loss)

Issuance of common stock

Employee stock plans

Sale of discontinued

Other comprehensive

3 unchanged sentences

Unrecognized pension

Balance at June 30,

The following tables present the change in equity for the six months ended June 30, 2021 and 2020, respectively:

Balance at September 30,

The following tables present the change in equity for the nine months ended September 30, 2021 and 2020, respectively:

(Dollars in millions)

5 unchanged sentences

Balance at December 31,

Net income (loss)

Issuance of common stock

6 unchanged sentences

sale of subsidiary

Unrealized gain on cash

Unrealized loss on cash

Unrecognized pension

Repurchases of common

Balance at June 30,

Balance at September 30,

(Dollars in millions)

5 unchanged sentences

Balance at December 31,

Net income (loss)

Issuance of common stock

Employee stock plans

Sale of discontinued

Other comprehensive

5 unchanged sentences

Repurchases of common

Balance at June 30,

Balance at September 30,

Earnings per Common Share

3 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per common share:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions, except share amounts, in thousands)

1 unchanged sentence

Income (loss) from discontinued operations, net of tax

Gain on sale of discontinued operations

(Loss) gain on sale of discontinued operations

Noncontrolling interest related to discontinued

18 unchanged sentences

Performance stock units have vesting based upon a market condition.

These performance stock units have multi-year performance objectives and a three-year period for vesting (if the applicable performance objective is achieved).

These performance stock units have multi-year performance objectives and a three-year period for vesting (if the applicable performance objectives are achieved).

The applicable performance objective is based on our total shareholder return relative to the Standard & Poor’s SmallCap 600 Materials Index.

16 unchanged sentences

There are special vesting provisions for the stock units related to a change in control.

The following table shows a summary of the performance stock units as of June 30, 2021:

The following table shows a summary of the performance stock units as of September 30, 2021:

Performance Period

The following table shows a summary of the status and activity of non-vested stock units for the six months ended June 30, 2021:

The following table shows a summary of the status and activity of non-vested stock units for the nine months ended September 30, 2021:

Weighted Average

3 unchanged sentences

Performance share adjustment

Non-vested at June 30, 2021

Non-vested at September 30, 2021

Stock Options

Stock options to most executive officers vest and become exercisable in four equal annual installments.

Stock options to executive officers vest and become exercisable in four equal annual installments.

The stock options have a term of ten years .

19 unchanged sentences

Treasury bill rates for the expected life of the option.

The following table shows a summary of the status and activity of stock options for the six months ended June 30, 2021:

The following table shows a summary of the status and activity of stock options for the nine months ended September 30, 2021:

Weighted Average

5 unchanged sentences

Outstanding at December 31, 2020

Outstanding at June 30, 2021

Exercisable at June 30, 2021

Outstanding at September 30, 2021

Exercisable at September 30, 2021

Stock Compensation Expense

Total stock-based compensation expense recognized under our LTIP and employee stock purchase plan for the three months ended June 30, 2021 and 2020 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Total stock-based compensation expense recognized under our LTIP and employee stock purchase plan for the three and nine months ended September 30, 2021 and 2020 is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

5 unchanged sentences

Cash received from the exercise of stock options

As of June 30, 2021 , total future compensation expense related to non-vested stock-based compensation arrangements is expected to total $ 22.5 million and the weighted-average period over which this expense is expected to be recognized is approximately 29 months .

As of September 30, 2021 , total future compensation expense related to non-vested stock-based compensation arrangements is expected to total $ 19.5 million and the weighted-average period over which this expense is expected to be recognized is approximately 27 months .

Segment Information

17 unchanged sentences

The timing of revenue recognition results in both billed accounts receivable and unbilled receivables, both classified as accounts receivable, net of allowance within the condensed consolidated balance sheet.

Contract assets of $ 9.8 million and $ 5.8 million are recorded within accounts receivable, net of allowance within the condensed consolidated balance sheet as of June 30, 2021 and December 31, 2020, respectively.

Contract assets of $ 13.3 million and $ 5.8 million are recorded within accounts receivable, net of allowance within the condensed consolidated balance sheet as of September 30, 2021 and December 31, 2020, respectively.

The following table sets forth certain sales and operating data, net of all intersegment transactions, for our segments for the periods indicated:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

14 unchanged sentences

Carbon Materials and Chemicals (c)

Revenue excludes KJCC revenue of $ 12.9 million and $ 22.8 million for the three and six months ended June 30, 2020, respectively.

Depreciation and amortization expense excludes KJCC expenses of $( 0.4 ) million and $ 0.5 million for the three and six months ended June 30, 2020, respectively.

Operating profit (loss) excludes KJCC amounts of $( 0.2 ) million and $( 5.3 ) million for the three and six months ended June 30, 2020, respectively.

Revenue excludes KJCC revenue of $ 8.8 million and $ 31.6 million for the three and nine months ended September 30, 2020, respectively.

Depreciation and amortization expense excludes KJCC expenses of $ 0.1 million and $ 0.6 million for the three and nine months ended September 30, 2020, respectively.

Operating profit (loss) excludes KJCC amounts of $ 0.3 million and $( 5.0 ) million for the three and nine months ended September 30, 2020, respectively.

The following table sets forth revenues for significant product lines, net of all intersegment transactions, for our segments for the periods indicated:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

13 unchanged sentences

The following table sets forth assets and goodwill allocated to each of our segments as of the dates indicated:

September 30,

(Dollars in millions)

10 unchanged sentences

Entities that have historical pre-tax losses and current year estimated pre-tax losses that are not projected to generate a future benefit are excluded from the estimated annual effective income tax rate.

The estimated annual effective income tax rate, excluding discrete items discussed above, was 25.8 percent and 27.8 percent for the three months ended June 30, 2021 and 2020, respectively.

The estimated annual effective income tax rate, excluding discrete items discussed above, was 26.8 percent and 25.8 percent for nine months ended September 30, 2021 and 2020, respectively.

The estimated annual effective income tax rate differs from the U.S.

federal statutory tax rate due to:

September 30,

Federal income tax rate

5 unchanged sentences

Estimated annual effective income tax rate

Income taxes as a percentage of pretax income were 26.0 percent for the three months ended June 30, 2021.

This is slightly higher than the estimated annual effective income tax rate due to minor discrete items .

Income taxes as a percentage of pretax income were 21.4 percent for the three months ended June 30, 2020.

This was lower than the estimated annual effective income tax rate due to discrete items, which were a net benefit of $ 2.4 million.

Discrete items were primarily related to a benefit for the release of a valuation allowance that was recorded for interest expense deduction limitations that were previously not expected to be realized.

Income taxes as a percentage of pretax income were 25.3 percent for the six months ended June 30, 2021.

This is lower than the estimated annual effective income tax rate due to discrete items , principally an excess tax deduction for vested stock awards.

Income taxes as a percentage of pretax income were 16.5 percent for the six months ended June 30, 2020.

This was lower than the estimated annual effective income tax rate due to discrete items, which were a net benefit of $ 4.2 million.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and a provision of the CARES Act temporarily increased the allowable business interest expense deduction from 30 percent of adjusted taxable income to 50 percent of adjusted taxable income, retroactively to January 1, 2019.

Any such limitation that is disallowed in a year could be carried forward to future years.

Due to the temporary change to the limitation, in the three and six months ended June 30, 2020 we recorded an income tax benefit of $ 2.5 million and $ 4.4 million, respectively, to reverse a portion of a previously recorded valuation allowance for carryforward amounts that we determined would be utilized.

Income taxes as a percentage of pretax income were 31.4 percent for the three months ended September 30, 2021.

This is higher than the estimated annual effective income tax rate primarily due to an increase in the estimated annual effective income tax rate when compared to the previous quarter’s estimate.

Income taxes as a percentage of pretax income were 18.0 percent for the three months ended September 30, 2020.

This was lower than the estimated annual effective income tax rate due to discrete items, which were a net benefit of $ 3.1 million for the three months ended September 30, 2020.

Discrete items were primarily related to the legislative changes and finalized regulations regarding the allowable business interest expense deduction that is discussed below and a benefit due to an amended tax return.

Income taxes as a percentage of pretax income were 26.4 percent for the nine months ended September 30, 2021.

This is lower than the estimated annual effective income tax rate due to several discrete items , none of which are material.

Income taxes as a percentage of pretax income were 17.4 percent for the nine months ended September 30, 2020.

This was lower than the estimated annual effective income tax rate due to discrete items, which were a net benefit of $ 7.3 million for the nine months ended September 30, 2020.

Discrete items were primarily related to the legislative changes and finalized regulations regarding the limitation on the interest expense deduction that is discussed below and a benefit due to an amended tax return.

These discrete items were offset by a tax deduction reduction for vested stock awards.

During 2020, two events occurred which enabled us to adjust our interest expense limitations on our 2018 and 2019 U.S.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted and a provision of the CARES Act increased the allowable business interest expense deduction to 50 percent of adjusted taxable income retroactively to January 1, 2019.

In July 2020, the Internal Revenue Service released regulations that were retroactive to January 1, 2018 and favorably impacted our calculation of adjusted taxable income.

After application of these new regulations, the limitation of our interest expense deduction was significantly reduced when compared to the same calculations under the previous regulations.

Due to these changes, in the three and nine months ended September 30, 2020 we recorded an income tax expense of $ 2.0 million and an income tax benefit of $ 2.4 million, respectively, to adjust a previously recorded valuation allowance for disallowed interest expense deductions that are eligible for carry-forward.

After review and application of these changes, we determined that we would be able to fully utilize these disallowed interest expense deductions.

Effective January 1, 2021, the limitation on the deduction was restored to 30 percent.

During the year, management regularly updates estimates of pre-tax income and income tax expense based on changes in pre-tax income projections by taxable jurisdiction, repatriation of foreign earnings, unrecognized tax benefits and other tax matters.

To the extent that actual results vary from these estimates, the actual annual effective income tax rate at the end of the year could be materially different from the estimated annual effective income tax rate for the three and six months ended June 30, 2021.

Unrecognized Tax Benefits

The Company files income tax returns in the U.S.

We file income tax returns in the U.S.

federal jurisdiction, individual U.S.

5 unchanged sentences

income tax examinations by tax authorities for years prior to 2016.

Unrecognized tax benefits totaled $ 2.5 million as of June 30, 2021 and December 31, 2020.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was approximately $ 2.5 million as of June 30, 2021 and December 31, 2020.

Unrecognized tax benefits totaled $ 2.3 million and $ 2.5 million as of September 30, 2021 and December 31, 2020.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was approximately $ 2.3 million and $ 2.5 million as of September 30, 2021 and December 31, 2020.

We recognize interest expense and any related penalties from unrecognized tax benefits in income tax expense.

As of June 30, 2021 and December 31, 2020, we had accrued approximately $ 0.9 million and $ 0.8 million for interest and penalties, respectively.

As of September 30, 2021 and December 31, 2020, we had accrued approximately $ 0.8 million and $ 0.8 million for interest and penalties, respectively.

We do not anticipate material changes to the amount of unrecognized tax benefits within the next twelve months.

Net inventories as of June 30, 2021 and December 31, 2020 are summarized in the table below:

Net inventories as of September 30, 2021 and December 31, 2020 are summarized in the table below:

September 30,

(Dollars in millions)

4 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment as of June 30, 2021 and December 31, 2020 are summarized in the table below:

Property, plant and equipment as of September 30, 2021 and December 31, 2020 are summarized in the table below:

September 30,

(Dollars in millions)

12 unchanged sentences

For salaried employees, the retiree medical and retiree insurance plans have been closed to new participants.

The following table provides the components of net periodic benefit cost for the pension plans for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30,

Six Months Ended June 30,

The following table provides the components of net periodic benefit cost for the pension plans for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

4 unchanged sentences

Defined contribution plan expense

Debt as of June 30, 2021 and December 31, 2020 was as follows:

Debt as of September 30, 2021 and December 31, 2020 was as follows:

Interest Rate

September 30,

(Dollars in millions)

6 unchanged sentences

Credit Facility

The Company maintains a $ 600.0 million senior secured revolving credit facility and a $ 100.0 million secured term loan facility (collectively, the “Credit Facility”), as amended.

We maintain a $ 600.0 million senior secured revolving credit facility and a $ 100.0 million secured term loan facility (collectively, the “Credit Facility”), as amended.

The secured term loan has a quarterly amortization of $ 2.5 million and the interest rate on the Credit Facility is variable and is based on LIBOR .

5 unchanged sentences

and its restricted subsidiaries to meet certain financial ratios.

As of June 30, 2021, we had $ 286.3 million of unused revolving credit availability for working capital purposes after restrictions from certain letter of credit commitments and other covenants.

As of June 30, 2021, $ 7.7 million of commitments were utilized by outstanding letters of credit.

As of September 30, 2021, we had $ 283.4 million of unused revolving credit availability for working capital purposes after restrictions from certain letter of credit commitments and other covenants.

As of September 30, 2021, $ 7.7 million of commitments were utilized by outstanding letters of credit.

Senior Notes due 2025

13 unchanged sentences

The following table reflects changes in the carrying values of asset retirement obligations:

September 30,

(Dollars in millions)

15 unchanged sentences

Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Operating lease costs were $ 7.6 million and $ 15.3 million during the three and six months ended June 30, 2021, respectively, and $ 7.4 million and $ 15.2 million during the three and six months ended June 30, 2020, respectively.

Variable lease costs were $ 0.8 million and $ 1.6 million during the three and six months ended June 30, 2021, respectively, and $ 0.8 million and $ 1.8 million during the three and six months ended June 30, 2020, respectively.

The following table presents information about the amount and timing of cash flows arising from our operating leases as of June 30, 2021:

Operating lease costs were $ 7.5 million and $ 22.8 million during the three and nine months ended September 30, 2021, respectively, and $ 8.1 million and $ 23.2 million during the three and nine months ended September 30, 2020, respectively.

Variable lease costs were $ 0.8 million and $ 2.4 million during the three and nine months ended September 30, 2021, respectively, and $ 0.8 million and $ 2.7 million during the three and nine months ended September 30, 2020, respectively.

The following table presents information about the amount and timing of cash flows arising from our operating leases as of September 30, 2021:

(Dollars in millions)

2 unchanged sentences

Supplemental condensed consolidated balance sheet information related to leases is as follows:

September 30,

(Dollars in millions)

22 unchanged sentences

These amounts are classified in cost of sales in the condensed consolidated statement of operations.

As of June 30, 2021 and December 31, 2020, we had outstanding copper swap contracts of the following amounts:

As of September 30, 2021 and December 31, 2020, we had outstanding copper swap contracts of the following amounts:

Units Outstanding (in Pounds)

Net Fair Value - Asset

September 30,

(Amounts in millions)

1 unchanged sentence

Contracts where hedge accounting was not

As of June 30, 2021 and December 31, 2020, the fair value of the outstanding copper swap contracts is recorded in the balance sheet as follows:

As of September 30, 2021 and December 31, 2020, the fair value of the outstanding copper swap contracts is recorded in the balance sheet as follows:

September 30,

(Dollars in millions)

3 unchanged sentences

Accumulated other comprehensive gain, net of tax

In the next twelve months , we estimate that $ 39.9 million of unrealized gains, net of tax, related to commodity price hedging will be reclassified from other comprehensive income into earnings .

See Note 6 – “Comprehensive Income and Equity”, for amounts recorded in other comprehensive income and for amounts reclassified from accumulated other comprehensive loss into net income (loss) for the periods specified below.

For the three and six months ended June 30, 2021 and 2020, the unrealized gain (loss) from contracts where hedge accounting was not elected is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

In the next twelve months , we estimate that $ 34.4 million of unrealized gains, net of tax, related to commodity price hedging will be reclassified from other comprehensive (loss) income into earnings .

See Note 6 – “Comprehensive (Loss) Income and Equity”, for amounts recorded in other comprehensive (loss) income and for amounts reclassified from accumulated other comprehensive loss into net income for the periods specified below.

For the three and nine months ended September 30, 2021 and 2020, the unrealized (loss) gain from contracts where hedge accounting was not elected is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

(Dollars in millions)

Gain (loss) from contracts where hedge accounting was not

(Loss) gain from contracts where hedge accounting was not

The fair value associated with forward contracts related to foreign currency that are not designated as hedges are immediately charged to earnings.

These amounts are classified in cost of sales in the condensed consolidated statement of operations and comprehensive income.

As of June 30, 2021 and December 31, 2020, the fair value of outstanding foreign currency forward contracts is recorded in the balance sheet as follows:

These amounts are classified in cost of sales in the condensed consolidated statement of operations and comprehensive (loss) income.

As of September 30, 2021 and December 31, 2020, the fair value of outstanding foreign currency forward contracts is recorded in the balance sheet as follows:

September 30,

(Dollars in millions)

2 unchanged sentences

Net (liability) asset on balance sheet

As of June 30, 2021 and December 31, 2020, the net currency units outstanding for these contracts were:

As of September 30, 2021 and December 31, 2020, the net currency units outstanding for these contracts were:

September 30,

(In millions)

8 unchanged sentences

is one of several defendants in lawsuits filed in two states in which the plaintiffs claim they suffered a variety of illnesses (including cancer) as a result of exposure to coal tar pitch sold by the defendants.

There were 61 plaintiffs in 32 cases pending as of June 30, 2021, compared to 64 plaintiffs in 34 cases pending as of December 31, 2020.

As of June 30, 2021, there were 31 cases pending in the Court of Common Pleas of Allegheny County, Pennsylvania, and one case pending in the Circuit Court of Knox County, Tennessee.

There were 61 plaintiffs in 32 cases pending as of September 30, 2021, compared to 64 plaintiffs in 34 cases pending as of December 31, 2020.

As of September 30, 2021, there were 31 cases pending in the Court of Common Pleas of Allegheny County, Pennsylvania, and one case pending in the Circuit Court of Knox County, Tennessee.

The plaintiffs in all 32 pending cases seek to recover compensatory damages.

60 unchanged sentences

The ROD does not determine who is responsible for remediation costs.

At that time, the net present value and undiscounted costs of the selected remedy as estimated in the ROD are approximately $ 1.1 billion and $ 1.7 billion, respectively.

The net present value and undiscounted costs of the selected remedy as estimated in the ROD are approximately $ 1.1 billion and $ 1.7 billion, respectively.

These costs may increase given the remedy will not be implemented for several years.

13 unchanged sentences

is a de minimis party at this site.

We have accrued the estimated costs of participating in the PRP group at the Portland Harbor and Newark Bay CERCLA sites as a de minimis contributor and estimated such settlement amounts at the sites totaling $ 3.4 million as of June 30, 2021.

The actual cost could be materially higher as there has not been a determination of how those costs will be allocated among the PRPs at the sites.

1 unchanged sentence

There are two plant sites related to the Performance Chemicals business and one plant site related to the Utility and Industrial Products business in the United States where we have recorded environmental remediation liabilities for soil and groundwater contamination which occurred prior to our acquisition of the businesses.

As of June 30, 2021, our estimated environmental remediation liability for these acquired sites totals $ 4.2 million.

As of September 30, 2021, our estimated environmental remediation liability for these acquired sites totals $ 4.2 million.

Foreign Environmental Matters .

There is one plant site related to the Performance Chemicals business located in Australia where we have recorded an environmental remediation liability for soil and groundwater contamination which occurred prior to the acquisition of the site.

As of June 30, 2021, our estimated environmental remediation liability for the site totals $ 1.4 million.

As of September 30, 2021, our estimated environmental remediation liability for the site totals $ 1.4 million.

Environmental Reserves Rollforward.

The following table reflects changes in the accrual for environmental remediation.

A total of $ 2.9 million are classified as current liabilities as of June 30, 2021 and December 31, 2020:

A total of $ 2.8 million and $ 2.9 million are classified as current liabilities as of September 30, 2021 and December 31, 2020:

September 30,

(Dollars in millions)

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements